Why is the Woolworths share price having such a stellar run on Monday?

The Woolworths Group Ltd (ASX: WOW) share price is having a solid day despite the market selloff.

In afternoon trade, the retail giant’s shares are up over 2.5% to $34.77.

This compares very favourably to the performance of the S&P/ASX 200 Index (ASX: XJO), which is currently down 1.4% to 6,484.2 points.

Why is the Woolworths share price outperforming?

The Woolworths share price is charging higher today despite there being no news out of the company.

However, it is worth noting that Woolworths is seen as a very defensive option for investors. That’s because demand for the products it sells remains reasonably consistent whatever is happening in the economy.

So, with the Australian share market being sold off today amid concerns that rising interest rates will lead to a global recession, investors appear to have been rotating out of riskier assets like lithium shares and into Woolworths.

It is likely to be for the same reason that rivals Coles Group Ltd (ASX: COL), Metcash Limited (ASX: MTS), and Wesfarmers Ltd (ASX: WES) are pushing higher today.

Is Woolworths good value?

One leading broker that would be supportive of this rotation is Goldman Sachs.

Its analysts recently reiterated their buy rating and $44.10 price target on the company’s shares.

Based on where Woolworths’ shares are trading currently, this implies potential upside of 27% over the next 12 months.

The post Why is the Woolworths share price having such a stellar run on Monday? appeared first on The Motley Fool Australia.

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More reading

• Could the current Woolworths dividend be in jeopardy?
• How many Woolworths shares does the CEO hold after his $8.4 million sell-down?
• Are these ASX blue-chip shares losing their defensive benefits?
• Attention Endeavour shareholders: Here’s some news on your dividends
• Have Woolworths shares ‘got their mojo back’?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended COLESGROUP DEF SET and Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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